119,000 added, jobless rate 4.4%

The U.S. economy added substantially more jobs than expected in September, according to a long-awaited report Thursday from the Bureau of Labor Statistics.

Nonfarm payrolls increased by 119,000 in the month, up from the 4,000 jobs lost in August following a downward revision. The Dow Jones consensus estimate for September was 50,000. The July total also was revised down to 72,000, a decrease of 7,000 from the prior release.

In addition to the headline jobs number, the BLS said the unemployment rate edged higher to 4.4%, the highest it’s been since October 2021. A broader measure that includes those not looking for jobs or working part-time for economic reasons edged lower to 8%.

Average hourly earnings increased 0.2% for the month and 3.8% from a year ago, compared to respective forecasts for 0.3% and 3.7%.

The report ends a data drought on the labor market that began in early September and continued through the record 44-day government shutdown. Agencies including the BLS, the Bureau of Economic Analysis and others were prohibited from collecting or releasing data during the period.

This was the first BLS jobs report since the count for August that was released Sept. 5. It also was the second since Trump fired then-BLS Commissioner Erika McEntarfer on Aug. 1, following a July jobs report that contained massive revisions for prior months.

“September’s jobs report shows the labor market still had resilience before the shutdown, beating payroll expectations, but the picture remains muddy with August jobs revised to a job loss and the unemployment rate increasing,” said Daniel Zhao, chief economist at jobs site Glassdoor. “These numbers are a snapshot from two months ago and they don’t reflect where we stand now in November.”

Stock market futures nevertheless added to gains following the report while Treasury yields were mostly lower.

Traders also continued to bet that the Federal Reserve will not lower rates further at its Dec. 9-10 meeting. This is the last jobs report Fed policymakers will get before then. Hawkish talk out of the October Fed meeting, as reflected in minutes released Wednesday, contributed to a general feeling that the central bank will be on hold into the end of the year.

“Despite the fact that today’s jobs report is very backward looking, it’s making markets move,” said Seema Shah, chief global strategist at Principal Asset Management. “Equities like the fact that payrolls were stronger than expected, suggesting the economy is still on a firm footing, while the bond market likes the rise in unemployment and slowdown in wage growth which may keep the case for a December Fed cut just about alive.”

Overall, the report shows the labor market entered the autumn months on much the same footing it has been all year – a slow but steady pace, with firms reluctant both to hire many new workers or lay off existing workforce during a time of unusual economic volatility spurred by aggressive policy actions in President Donald Trump’s White House.

A separate Labor Department release Thursday showed that initial jobless claims totaled 220,000 for the week ending Nov. 15, down 8,000 from the prior period and lower than the consensus forecast for 227,000.

Job gains in September came from familiar sources, with health care leading at 43,000, about right on target with its pace over the past year. Bars and restaurants contributed 37,000 while social assistance added 14,000.

On the downside, transportation and warehousing lost 25,000 and federal government, which had been a large contributor to employment growth, was off 3,000, part of a loss of 97,000 on the calendar year. Professional and business services also reported a decline of 20,000, fueled by a drop of 16,000 in temporary help.

The household survey, used to calculate the unemployment rate, painted an even brighter picture of the labor market.

The total level of those employed rose by 251,000 while the labor force increased by 470,000 to a fresh record of 171.2 million. The participation rate, which measures the share of the working-age population either working or seeking employment, edged higher to 62.4, the highest since May.

The rolls of full-time employment swelled by 673,000 while part-times fell by 573,000.

The lack of comprehensive indicators has presented a challenge for Fed officials, who cut their benchmark interest rate in both September and October but face a tougher decision in December. Officials at the October meeting noted the difficulty in navigating policy without the usual array of economic metrics to rely on, and there was a significant inclination to forgo a December cut, according to meeting minutes released Wednesday.

With September’s payrolls count released, the BLS is preparing the first influx of other data in coming months. The bureau on Wednesday announced it will release jobs data for October and November simultaneously on Dec. 16. October’s numbers will not include the customary unemployment rate calculation as that comes from a survey of households that will not be able to be completed because of the shutdown.